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Whether the inflationary cycle was a symptom or one of the reasons for the Southern Song’s demise is open to argument. Still, there is no argument that it did not help the overall situation – the Song leaders could no longer pay to field armies nor pay the annual tribute to their more martial-minded neighbors in the north.
===The What was the Impact of Song Paper Currency=in Asia? ==
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The impact of the invention/discovery of paper currency during the Song Dynasty was profound , to say the least. Although the concept never made its way to the West, it indeed spread throughout east Asia during the Middle Ages. The Jurchen Jin Dynasty, which ruled northern China from 1127 to 1234, issued paper notes in the mid-1150s based on the notes the Song rulers originally issued in Sichuan and later issued other notes that were tied to silver, as the Southern Song had done. <ref> Glahn 2010, p. 469, 472</ref>
The Mongol Yuan Dynasty replaced the Song, and although foreign, the Yuan instituted a policy of cultural continuity, which included the use of paper money. Like the Jurchen Jin Dynasty, the Yuan rulers followed the Southern Song policy of tying their paper currency to silver. <ref> Glahn 2010, p. 483</ref> From China, the concept of paper money spread to other East Asian kingdoms such as Korea.
Perhaps one of the biggest impacts that the invention of paper money had in Asia was the diminishing value of bronze, copper, and iron coins. Once the Southern Song tied their paper notes to silver, the intrinsic value of metal coins declined, which resulted in much of those metals being exported to Japan. <ref> Glahn 2010, p. 501</ref> In fact, the use of paper currency in China hurt the metals industry in general as mining withered during the Southern Song. <ref> Smith, Paul J. “Do We Know as Much as We Need to Know About the Song Economy? Observations on the Economic Crisis of the Twelfth and Thirteenth Centuries” <i>Journal of Song-Yuan Studies</i> 24 (1994) p. 329</ref> The Song discovery of paper currency truly had a great impact on East Asia, but it would be centuries before Europeans discovered the benefits and drawbacks of using paper notes.
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